Copier Firm to Pay $82,000 in Suit Settlement : Westlake: Preferred Copy Corp. admits no wrongdoing despite charges of rolling back counters on used machines sold to schools and churches.

A Westlake company accused of misrepresenting the wear and tear on photocopy machines it sold to schools and churches agreed Wednesday to pay $82,000 to settle a lawsuit filed by the Ventura County district attorney’s office.

The settlement by Preferred Copy Corp.--which includes $32,000 in restitution to 14 customers--came after an 11-month investigation by the consumer fraud unit of the district attorney’s office.

The company, which sells used photocopy machines and service contracts for the copiers, agreed to the settlement without admitting any wrongdoing.

But prosecutors, who received complaints about Preferred Copy as far back as 1990, claim in their civil lawsuit that the company reset copy counters on its machines to make them appear to have less use than they actually had.

In addition, the lawsuit says, Preferred Copy engaged in false advertising by misrepresenting where the used machines came from, falsely stating that the company was an authorized dealer for certain name-brand machines and misrepresenting how quickly service would be provided for machines that broke down.

Deputy Dist. Atty. Gregory Brose, who heads the consumer fraud unit, said the advertising was aimed at vulnerable groups such as churches and nonprofit organizations, which were lured by promises of a free machine.

Once potential customers contacted Preferred Copy, they were told they had to buy a service contract in order to get the free machine, Brose said. In many cases the cost of the contract was more than the value of the copy machine, he said.

Former employees tipped prosecutors that the counters on the machines were being rolled back, Brose said.

“Clearly, the conduct was intentional,” Brose said. “We don’t think that somebody accidentally rolled back the counters.”

Mark Klenin, president of Preferred Copy, said he was “very pleased” with the settlement.

“It was worked out well for everybody,” Klenin said.

He refused to address the individual charges against the company, insisting there were none because the lawsuit was settled.

The final judgment in the case, signed by Superior Court Judge Steven Z. Perren, requires Preferred Copy to pay a $50,000 civil penalty to Ventura County. The $32,000 restitution payment will go to 14 customers, including five churches and four schools.

District attorney records provided by Brose showed that restitution payments range from $500 to $4,900. The Moorpark Unified School District is to be paid $4,000, and Bible Fellowship Church in Ventura is to receive $3,519, according to the records.

Deputy Dist. Atty. Michael D. Schwartz, who filed the lawsuit, said Preferred Copy sold some of the service contracts to finance companies. In addition to the restitution, Preferred Copy must assume the finance payments for seven customers.

Schwartz said Preferred Copy told customers it had 70 service technicians, when in fact it had six or seven. The company also promised to make service calls on broken machines within four hours, but customers complained that they often waited days to get service.

Brose said the machines frequently broke down because they were so old.